IMAX CORPORATION
Exhibit 99.1
[IMAX LOGO]
IMAX CORPORATION
2525 Speakman Drive
Mississauga, Ontario, Canada L5K 1B1
Tel: (905) 403-6500 Fax: (905) 403-6450
www.imax.com
IMAX CORPORATION REPORTS THIRD QUARTER 2004 FINANCIAL RESULTS
HIGHLIGHTS
- - Company reports earnings and revenues ahead of management guidance and the
First Call mean, and reaffirms earnings guidance for full year 2004.
- - Company reports best signings quarter in seven years, with contracts for 15
new IMAX(R) theatre systems.
- - Deals with top North American commercial exhibitors bring total signings
year-to-date to 25, closing in on Company's goal of 30-35 for 2004.
- - First Hollywood IMAX(R) 3D full-length animated feature film, The Polar
Express: AN IMAX 3D Experience, hits theatres as a day-and-date release on
November 10.
TORONTO - October 28, 2004 - IMAX Corporation (NASDAQ: IMAX; TSX: IMX) today
reported net earnings of $0.05 per diluted share for the three months ended
September 30, 2004, significantly ahead of management's guidance for a breakeven
quarter and the First Call mean of $0.01. This compares to a net loss of $0.07
per diluted share for the three months ended September 30, 2003. Excluding a
half-cent gain from discontinued operations, earnings from continued operations
were $0.04 in the third quarter of this year, as compared to a loss from
continued operations of $0.07 in the year-ago quarter.
The Company's consolidated revenues were $31.8 million for the third quarter
2004, compared to $21.2 million reported for the prior year period. IMAX Systems
revenue was $21.3 million versus $11.5 million in the prior year period, as the
Company recognized revenue on six theatre systems versus one in the third
quarter of 2003. Film revenue was $6.1 million versus $5.3 million in the same
period last year, and Theatre Operations revenue increased to $3.7 million from
$3.4 million. Other revenues decreased to $0.8 million in the third quarter of
2004 from $1.1 million in the same period last year. The Company also increased
its cash position to $20.7 million at the end of September from $17.0 million at
the end of June.
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"In the third quarter, we not only met our financial goals, with net earnings,
revenues and cash beating expectations, but we also continued to hit our
strategic goals, demonstrating strong progress towards our objective of making
IMAX(R) theatres synonymous with a premium-priced destination in the commercial
entertainment marketplace," said IMAX Co-Chief Executive Officers Richard L
Gelfond and Bradley J. Wechsler, "Our financial results are now starting to
reflect the traction we are seeing in the commercial exhibition marketplace and
we believe we are on track to meet our previously stated goal of earnings for
the full year of $0.25 per share, before refinancing costs of $0.02 per share."
The Company reached agreement for the sale or lease of 15 theatre systems in the
September quarter, marking its best quarter for signings since the fourth
quarter of 1997. These signings, which have a total value of $21.9 million,
represent a 200% increase in signings versus the third quarter of last year and
a significant acceleration from the four system signings reported in the second
quarter of the year and six signings reported in the first quarter. For the
first nine months of the year, the Company reached agreement for the sale or
lease of 25 theatre systems, as many as were signed in the full year 2003. These
third quarter signings represent a 39% increase from the 18 systems signings
reported for the comparable nine-month period in 2003, and move the Company
closer to its stated target of 30-35 signings for the full year.
Signings during the third quarter included agreements with three of the world's
largest exhibitors, National Amusements Inc., Cinemark USA, and Cinepolis, which
represent eleven scheduled installations with an opportunity to expand to as
many as twenty-three IMAX systems. In August, National Amusements, parent
company of Viacom and the sixth largest domestic exhibitor, signed an agreement
for six theatre systems with an option to expand that to as many as eighteen.
Four of these new IMAX(R) MPX(TM) systems will be installed during the fourth
quarter, demonstrating the short time frame required for an exhibitor to
retrofit an existing multiplex theatre to incorporate the IMAX MPX system. Also
in August, Cinemark, the number-three domestic operator, signed an agreement for
two IMAX systems, growing its IMAX theatre commitment from five to seven. In
September, Cinepolis, the largest exhibitor in Latin America and the eighth
largest in the world, ordered three IMAX systems, the first of which is expected
to install this Fall at Mexico City's Cinepolis Perisur multiplex, the
highest-grossing multiplex in the country.
"The IMAX commercial theatre network continues to grow, as we just completed the
best quarter in seven years in terms of signings, which serve as the best
forward indicator of our near-term growth and predictor of financial results,"
continued Messrs. Gelfond and Wechsler, "The success that many of our customers
are experiencing with IMAX DMR(R) films is leading to increased interest from
exhibitors around the world, and we have not seen this level of inquiries in
more than five years."
During the third quarter, IMAX theatres exhibited two major Hollywood
blockbuster films, both of which demonstrated the broad audience appeal and
strong box office "legs" characteristic of an IMAX DMR film. Warner Bros.
Pictures' Harry Potter and the Prisoner of Azkaban: The IMAX Experience and
Spider-Man 2: The IMAX Experience from Sony's Columbia Pictures, which became
the fourth major Hollywood studio to release an event film in IMAX's format,
shared screen-time throughout the summer, generating a strong combined box
office for commercial exhibitors.
Also during the quarter, IMAX and Warner Bros. Pictures announced that they
would jointly produce their second original IMAX(R) 3D film, Denizens of the
Deep, for release in 2006. This is Warner Bros. Pictures' sixth film commitment
to IMAX theatres in just the past 18 months, and follows on the heels of NASCAR
3D: The IMAX Experience, a film that has already grossed more than $19 million.
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In just two weeks, on November 10, IMAX will release the much-anticipated 3D
version of Warner Bros. Pictures' major holiday film, The Polar Express. The 3D
IMAX DMR version of this Robert Zemeckis film, based on the classic children's
book and starring Tom Hanks, will open day-and-date, or simultaneously, with the
film's 35mm 2D release, and marks the first-ever release of a full-length
Hollywood event film in the unparalleled IMAX 3D format.
"A proven 'win' at the box office and with consumers, Hollywood event films
converted to IMAX's format are helping to drive the top-line results sought by
commercial exhibitors to generate strong financial returns on their IMAX
systems," concluded Messrs. Gelfond and Wechsler. "We are pleased with the
performance of our summer event films and look forward to the day-and-date
release of The Polar Express, the first-ever Hollywood feature film in IMAX 3D.
We expect consumer reaction and recent box office successes to continue to
accelerate our ongoing discussions with other major studios and believe that
2005 will be our best year ever for Hollywood films in IMAX theatres."
For the nine-month period ended September 30, 2004, the Company's consolidated
revenues were $88.5 million as compared to $89.3 million in the prior year
period. Systems revenue was $57.8 million versus $55.9 million in the prior year
period, with the Company recognizing revenue on thirteen theatre systems versus
fifteen theatre systems in the year-ago period. Film revenue was $17.2 million,
as compared to $19.6 million for the nine months ended September 30, 2003.
Theatre operations revenue was $11.2 million for the nine months ended September
30, 2004, as compared to $10.1 million in the same period last year. Other
revenues were $2.3 million, as compared to $3.7 million in the same period last
year. The Company reported net earnings of $0.06 per diluted share for the nine
months ended September 30, 2004, as compared to net earnings of $0.02 per
diluted share for the prior year period.
The Company will host a conference call to discuss these results at 10:30 AM ET.
To access the call interested parties should call (719) 457-2657 approximately
10 minutes before it begins. A recording of the call will be available by
dialing (719) 457-0820. The code for both calls is 827961.
###
ABOUT IMAX CORPORATION
Founded in 1967, IMAX Corporation is one of the world's leading entertainment
technology companies. IMAX's businesses include the creation and delivery of the
world's best cinematic presentations using proprietary IMAX and IMAX 3D
technology, and the development of the highest quality digital production and
presentation. IMAX has developed revolutionary technology called IMAX DMR
(Digital Re-mastering) that makes it possible for virtually any 35mm film to be
transformed into the unparalleled image and sound quality of The IMAX
Experience(R). The IMAX brand is recognized throughout the world for
extraordinary and immersive family entertainment experiences. As of September
30, 2004, there were more than 235 IMAX theatres operating in 35 countries.
IMAX(R), IMAX(R) 3D, IMAX DMR(R), IMAX(R) MPX(TM), and The IMAX Experience(R)
are trademarks of IMAX Corporation. More information on the Company can be found
at www.imax.com.
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This press release contains forward looking statements that are based on
management's assumptions and existing information and involve certain risks and
uncertainties which could cause actual results to differ materially from future
results expressed or implied by such forward looking statements. Important
factors that could affect these statements include the timing of theatre system
deliveries, the mix of theatre systems shipped, the timing of the recognition of
revenues and expenses on film production and distribution agreements, the
performance of films, the viability of new businesses and products, and
fluctuations in foreign currency and in the large format and general commercial
exhibition market. These factors and other risks and uncertainties are discussed
in the Company's Annual Report on Form 10-K/A for the year ended December 31,
2003 and in the subsequent reports filed by the Company with the Securities and
Exchange Commission.
For additional information please contact:
MEDIA: ANALYSTS:
IMAX CORPORATION, New York IMAX CORPORATION, New York
Romi Schutzer Cheryl Cramer
212-821-0144 212-821-0121
rschutzer@imax.com ccramer@imax.com
ENTERTAINMENT MEDIA: BUSINESS MEDIA:
Newman & Company, Los Angeles Sloane & Company, New York
Al Newman Whit Clay
818-784-2130 212-446-1864
asn@newman-co.com wclay@sloanepr.com
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IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(in thousands of U.S. dollars, except per share amounts)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- ----------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
REVENUE
IMAX systems $ 21,309 $ 11,455 $ 57,811 $ 55,913
Films 6,076 5,275 17,166 19,570
Theater operations 3,689 3,367 11,203 10,142
Other 753 1,131 2,276 3,702
------------- ------------- ------------- -------------
31,827 21,228 88,456 89,327
COSTS OF GOODS AND SERVICES 17,356 11,538 47,014 49,352
------------- ------------- ------------- -------------
GROSS MARGIN 14,471 9,690 41,442 39,975
Selling, general and administrative expenses 7,587 8,265 24,541 24,864
Research and development 1,019 952 3,034 2,833
Amortization of intangibles 240 181 545 473
Income from equity-accounted investees -- (228) -- (501)
Receivable provisions, net of (recoveries) 2 (425) (965) 264
------------- ------------- ------------- -------------
EARNINGS FROM OPERATIONS 5,623 945 14,287 12,042
Interest income 439 105 664 515
Interest expense (4,378) (3,606) (12,566) (11,949)
Loss on retirement of notes -- (146) (784) (333)
Recovery on long-term investments -- 355 -- 355
------------- ------------- ------------- -------------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 1,684 (2,347) 1,601 630
Recovery of (provision for) income taxes (84) (163) 255 400
------------- ------------- ------------- -------------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 1,600 (2,510) 1,856 1,030
Net earnings (loss) from discontinued operations 200 (144) 600 (292)
------------- ------------- ------------- -------------
NET EARNINGS (LOSS) $ 1,800 $ (2,654) $ 2,456 $ 738
============= ============= ============= =============
EARNINGS PER SHARE:
Earnings per share - basic and diluted:
Net earnings (loss) from continuing operations $ 0.04 $ (0.07) $ 0.05 $ 0.03
Net earnings (loss) from discontinued operations $ 0.01 $ -- $ 0.01 $ (0.01)
-------------- -------------- -------------- --------------
Net earnings (loss) $ 0.05 $ (0.07) $ 0.06 $ 0.02
============== ============== ============== ==============
Weighted average number of shares outstanding (000's):
Basic 39,316 37,091 39,310 34,592
Diluted 39,892 37,091 39,711 35,124
Additional disclosure:
Depreciation and amortization (1) $ 3,980 $ 2,400 $ 10,537 $ 8,243
(1) Includes $0.3 million and $0.9 million in amortization of deferred
financing costs charged to interest expense for the three and nine months
ended September 30, 2004 (2003 - $0.2 million, $0.5 million)
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IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(in thousands of U.S. dollars)
SEPTEMBER 30,
2004 DECEMBER 31,
(UNAUDITED) 2003
------------- ------------
ASSETS
Cash and cash equivalents $ 20,664 $ 47,282
Restricted cash -- 4,961
Accounts receivable, net of allowance for doubtful
accounts of $7,902 (2003 - $7,278) 17,574 13,887
Financing receivables 60,774 56,742
Inventories 27,374 28,218
Prepaid expenses 3,480 1,902
Film assets 734 1,568
Fixed assets 31,357 35,818
Other assets 13,275 13,827
Deferred income taxes 4,545 3,756
Goodwill 39,027 39,027
Other intangible assets 3,116 3,388
--------- ---------
Total assets $ 221,920 $ 250,376
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LIABILITIES
Accounts payable $ 6,633 $ 5,780
Accrued liabilities 53,792 43,794
Deferred revenue 50,640 63,344
New Senior Notes due 2010 160,000 160,000
Old Senior Notes due 2005 -- 29,234
--------- ---------
Total liabilities 271,065 302,152
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT)
Capital stock - no par value. Authorized -
unlimited number. Issued and outstanding -
39,315,491 (2003 - 39,301,758) 115,653 115,609
Other equity 3,290 3,159
Deficit (168,733) (171,189)
Accumulated other comprehensive income 645 645
--------- ---------
Total shareholders' deficit (49,145) (51,776)
--------- ---------
Total liabilities and shareholders' equity (deficit) $ 221,920 $ 250,376
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